<ARTICLE> 5
<LEGEND>

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TOWNE SERVICES, INC. FOR THE THREE MONTHS ENDED MARCH 
31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL 
STATEMENTS.
</LEGEND>
<RESTATED>
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          MAR-31-1998
<PERIOD-END>                               MAR-31-1998
<CASH>                                       3,500,010
<SECURITIES>                                         0
<RECEIVABLES>                                  429,007
<ALLOWANCES>                                    70,000
<INVENTORY>                                          0
<CURRENT-ASSETS>                             4,529,277
<PP&E>                                         825,849
<DEPRECIATION>                                 138,486
<TOTAL-ASSETS>                               5,523,501
<CURRENT-LIABILITIES>                        1,370,238
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                  1,508,000
<COMMON>                                    17,457,055
<OTHER-SE>                                 (16,566,954)
<TOTAL-LIABILITY-AND-EQUITY>                 5,523,501
<SALES>                                              0
<TOTAL-REVENUES>                               547,954
<CGS>                                                0
<TOTAL-COSTS>                                8,252,586
<OTHER-EXPENSES>                               323,000
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              64,289
<INCOME-PRETAX>                             (8,091,921)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                         (8,091,921)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                (8,091,921)
<EPS-PRIMARY>                                    (1.11)
<EPS-DILUTED>                                    (1.11)